Assume that your required rate of return is 12 percent and you are given the following stream of cash flows: \[\begin{array} { l c } \underline{ \text {Year } } & \underline{\text { Cash Flow} } \\ 1 & \$ 10,000 \\ 2 & 15,000 \\ 3 & 15,000 \\ 4 & 15,000 \\ 5 & 15,000 \\ 5 & 20,000 \end{array}\] If payments are made at the end of each period, what is the present value of the cash flow stream?

A) $66,909 B) $57,323 C) $61,815 D) $52,345 E) $62,029 A) $66,909 B) $57,323 C) $61,815 D) $52,345 E) $62,029

Exam 4: Time Value of Money

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You have determined the profitability of a planned project by finding the present value of all the cash flows form that project.Which of the following would cause the project to look more appealing in terms of the present value of those cash flows?

(Multiple Choice)

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Question 81

What is the term used to describe an annuity with an infinite life?

(Multiple Choice)

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Question 82

If you buy a factory for $250,000 and the terms are 20 percent down, the balance to be paid off over 30 years at a 1 rate of interest on the unpaid balance, what are the 30 equal annual payments?

(Multiple Choice)

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Question 83

You plan to invest an amount of money in five-year certificate of deposit (CD) at your bank.The stated interest rate applied to the CD is 12 percent, compounded monthly.How much must you invest if you want the balance in the CD account to be $8,500 in five years?

(Multiple Choice)

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Question 84

Your father, who is 60, plans to retire in 2 years, and he expects to live independently for 3 years.He wants a retirement income which has, in the first year, the same purchasing power as $40,000 has today.However, his retirement income will be of a fixed amount, so his real income will decline over time.His retirement income will start the day he retires, 2 years from today, and he will receive a total of 3 retirement payments.Inflation is expected to be constant at 5 percent.Your father has $100,000 in savings now, and he can earn 8 percent on savings now and in the future.How much must he save each year, starting today, to meet his retirement goals?

(Multiple Choice)

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Question 85

Assume that your required rate of return is 12 percent and you are given the following stream of cash flows: 1 \ 10,000 2 15,000 3 15,000 4 15,000 5 15,000 5 20,000 If payments are made at the end of each period, what is the present value of the cash flow stream?

(Multiple Choice)

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Question 86

Which of the following statements is correct?

(Multiple Choice)

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Question 87

Which of the following statements is correct?

(Multiple Choice)

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Question 88

If a 5-year regular annuity has a present value of $1,000, and if the interest rate is 10 percent, what is the amount of each annuity payment?

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Question 89

Showing 81 - 89 of 89

You have determined the profitability of a planned project by finding the present value of all the cash flows form that project.Which of the following would cause the project to look more appealing in terms of the present value of those cash flows?

What is the term used to describe an annuity with an infinite life?

If you buy a factory for $250,000 and the terms are 20 percent down, the balance to be paid off over 30 years at a 1 rate of interest on the unpaid balance, what are the 30 equal annual payments?

You plan to invest an amount of money in five-year certificate of deposit (CD) at your bank.The stated interest rate applied to the CD is 12 percent, compounded monthly.How much must you invest if you want the balance in the CD account to be $8,500 in five years?

Assume that your required rate of return is 12 percent and you are given the following stream of cash flows: 1 \ 10,000 2 15,000 3 15,000 4 15,000 5 15,000 5 20,000 If payments are made at the end of each period, what is the present value of the cash flow stream?

Which of the following statements is correct?

Which of the following statements is correct?

If a 5-year regular annuity has a present value of $1,000, and if the interest rate is 10 percent, what is the amount of each annuity payment?

An Overview of Managerial Finance

Analysis of Financial Statements

The Financial Environment: Markets, Institutions, and Investment Banking

The Cost of Money Interest Rates

Bonds Debt Characteristics and Valuation

Socks Equity Characteristics and Valuation

Risk and Rates of Return

Capital Budgeting Techniques

Project Cash Flows and Risk Appendix

The Cost of Capital

Capital Structure

Distribution of Retained Earrings: Dividends and Stock Repurchases

Working Capital Policy

Managing Short- Term Assets

Managing Short-Term Liabilities Financing

Financial Planning and Control

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